Blockchain-based Trade Financing Platform Goes Live in Hong Kong

The blockchain-based trade financing platform driven by the Honk Kong Monetary Authority (HKMA) officially launched recently after two years in the making. The eTrade Connect platform was developed to significantly reduce the time to finance international trade. Traditionally, such transactions could take two days or more to be approved; on the new blockchain platform, loan applications can be executed in as little as four hours.

The efficiency comes from the digitization of documents and automation of many of the processes involved in international trade finance. The efficiency and transparency enabled by putting the transactions on a distributed ledger simplifies interactions and also increases security of the transactions, including reducing risk of fraud.

In 2017, the industry, which has relied on outdated manual, paper-based processes, conducted more than $9 trillion in transactions. The new platform promises to not only expedite loan approvals, but reduce costs by eliminating much of the manual work.

“Blockchain has transformed a cumbersome, complex process into a simpler but more secure and efficient way of conducting trade,” according to Pricerite Chairman Bankee Kwan in an HSBC statement.

Many of the region’s largest investment banks were part of the development process, including HSBC, BNP Paribas, and Standard Chartered.

“It is a remarkable moment to witness the birth of the first blockchain-based trade finance platform built by key industry players in Hong Kong,” said Howard Lee, deputy chief executive of HKMA. “It demonstrates the willingness of the financial industry to adopt new technology in the new era of smart banking.”

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